Markets

CHICAGO — Yields on floating-rate municipal prepaid gas bonds with ties to BP have spiked to nearly 9% from less than 0.5% as credit analysts continue to cut their ratings on the oil giant.

The Bond Buyer’s weekly yield indexes were narrowly mixed this week as municipals remained unchanged through much of the week, with the tone shifting from negative to positive.

Tax-exempt money market funds rebounded slightly the week ending June 21 to post inflows of $485.3 million after losing nearly $3 billion in the prior reporting period, according to the Money Fund Report, a service of iMoneyNet.com. The influx caused total assets to rise to $352.34 billion from $351.84 billion.

Vanguard is jumping into the municipal bond exchange-traded fund fray, proposing to launch three muni ETFs with the lowest fees in the industry.

Wells Fargo is merging nearly $2.2 billion of Evergreen Investments municipal bond mutual funds into existing Wells funds as part of the bank’s purchase of Wachovia.

Essential service bonds continue to be considered among the safest municipal market investments, faring better than general obligations bonds in the current economic environment, on the back of the rate-setting ability of issuers and investor perception that these bonds are more immune to fiscal stress, according to market sources.

A $1.75 billion sale from California’s Bay Area Toll Authority will join a $1.4 billion offering of subordinate sales-tax revenue bonds from the Puerto Rico Sales Tax Financing Corp. to dominate the primary activity this week as the market prepares for an estimated $8.21 billion in new long-term volume, according to Ipreo LLC and The Bond Buyer.

Flows into municipal bond mutual funds remain moderate by recent standards.

The sovereign debt crisis in Europe is coupling with the general malaise in financial markets to make life easier for tax-free money market funds by boosting key short-term interest rates.